Don’t treat Italy like Greece, Spain’s Borrell tells Brussels

The European Commission should not respond to the budget spat with Italy the same way as it treated Greece, Spanish Foreign Minister Josep Borrell said today.

"It would be a big mistake for the European Commission to try to deal with Italy the same way they dealt with Greece, imposing a very tough constraint on the budget, a strong austerity policy, because Italy is not Greece," Borrell said in an interview with POLITICO's Ryan Heath.

The Italian government, an alliance of the far-right League and anti-establishment 5Star Movement, wants to boost spending to kickstart the economy and flout EU fiscal rules, risking a so-called excessive deficit procedure by the Commission that could result in fines.

"Italy cannot afford a second recession," said Borrell, a veteran Socialist politician and former president of the European Parliament. "I hope the Italian government and the European Commission will be able to slow down their mutual criticism and start a kind of agreement, Portugal-style."

Borrell said Spain's Portuguese neighbors had secured sufficient fiscal flexibility from Brussels to put the economy on a path to growth, and he suggested that Spain, too, could benefit from such flexibility. But in Spain's case, he said, the opposition rather than Brussels is now blocking Prime Minister Pedro Sánchez's proposals for a more expansive budget which would, in the words of the budget text itself, "reverse the scars of austerity." The minister described the opposition's behavior as irrational.

"The big problem with Spain's budget doesn't come from Brussels, it comes from the opposition," said Borrell.